Registering a company in El Salvador is a strategic decision for entrepreneurs looking for preferential access to key markets. Located in the heart of Central America, the country has trade agreements with 41 nations, facilitating the export of goods and services to high-value international markets.
Additionally, investing in El Salvador provides advantages such as strategic geographic location and a skilled Salvadoran workforce, both essential factors when establishing a company in El Salvador.
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– Registrar una empresa en El Salvador –
El Salvador has positioned itself as the safest country in Latin America and an ideal destination for businesses and investments. The country offers a pro-business environment supported by modernized foreign trade regulations, new infrastructure, digitalized procedures, and a strong legal framework that protects and promotes Foreign Direct Investment (FDI). These factors contribute to economic growth when incorporating a company in El Salvador.
Furthermore, El Salvador became the first Central American country to recognize Bitcoin as legal tender in 2021. Bitcoin law is relatively simple and establishes Bitcoin as an accepted currency for transactions.
At Interbiznet, we understand the importance of company incorporation in El Salvador. To assist you in this process, we have created a detailed guide outlining the essential steps to register a business in El Salvador.
Start your company in El Salvador today
Continue reading to discover how to successfully incorporate your company in El Salvador and make your entrepreneurial vision a reality.
Step 1 – Define legal business structure in El Salvador
Before starting a company incorporation process in El Salvador, it is essential to determine the type of business entity you want to establish. In El Salvador, the available options include corporations (Sociedad Anónima – SA), general partnerships (Sociedad en Nombre Colectivo – SNC/SC), and simplified joint-stock companies (Sociedades por Acciones Simplificadas – SAS), among others. Analyze the characteristics of each and select the most suitable structure for your business in El Salvador.
a) General Partnership (Sociedad en Nombre Colectivo – SNC/SC):
This type of business in El Salvador is established under a company name that includes one or more partners. Partners share joint and unlimited liability for company obligations, participate in management, and can appoint a legal representative. The company’s capital is divided into shares, which can be of different values. (Articles 73–92 of the Salvadoran Commercial Code).
b) Limited Liability Company (Sociedad de Responsabilidad Limitada – Ltda):
This business structure in El Salvador operates under a company name followed by “Limitada” (Ltda.). Partners have limited liability, protecting their personal assets from business debts. This structure is suitable for small businesses with a limited number of partners and low capital requirements. (Articles 101–124 of the Salvadoran Commercial Code).
c) Corporation (Sociedad Anónima – SA):
A corporation in El Salvador is established with a unique business name, followed by “Sociedad Anónima” (S.A.). Shareholders’ liability is limited to their investment in El Salvador, making it an ideal structure for medium to large enterprises looking to raise capital through stock sales. (Articles 191–295 of the Salvadoran Commercial Code).
d) Simplified Joint-Stock Company (Sociedades por Acciones Simplificadas – SAS):
A Simplified Joint-Stock Company (SAS) in El Salvador is a legal entity created by one or more individuals or legal entities. Shareholders have limited liability, restricted to their respective capital contributions. The company maintains a commercial nature regardless of its business activities. This structure is ideal for startups and growing businesses due to its flexibility and simplified requirements.
Incorporate a Company in El Salvador – Types of companies.
The following are the procedures and requirements to incorporate a company in El Salvador. At interbiznet we offer our services in order to facilitate this process, in addition to providing accounting and administrative services.
Company Incorporation in El Salvador
How long does it take to incorporate a company in El Salvador?
How to register a business in El Salvador?
To incorporate a company in El Salvador, you must meet legal requirements to ensure proper business registration.
1. Incorporation of a national company in El Salvador
- Company incorporation deed notarized by a Salvadoran notary.
- Minimum of two shareholders (individuals or legal entities).
- Minimum share capital: $2,000 USD. At least $100 USD (5%) must be paid upfront via a certified check from a Salvadoran bank.
2. Business Registration at the National Registry Center (CNR)
To register a company in El Salvador, you need:
- Original notarized company incorporation deed.
- Registration fee: $0.57 per every $114.29 USD of capital.
- Copy of the incorporation deed (reduced to 74%).
3. Initial balance Sheet registration
- Externally audited initial balance sheet (original and copy).
- Registration fee: $17.14 USD.
- Copy of the document reduced to 74%.
4. How to obtain the NIT (Tax Identification Number)?
To establish a company in El Salvador, you must register for an NIT (Número de Identificación Tributaria) at the Ministry of Finance:
- Complete Form F-210V4.
- Original and copy of the company incorporation deed.
- Original and certified copies of the NIT of the legal representative and shareholders.
- Proof of business address (utility bills or rental contract).
- Fee: First issuance $2.00 USD, Replacement $6.00 USD.
5. VAT (IVA) registration
To operate legally, your business in El Salvador must register for Value Added Tax (IVA):
- Form F-210V4.
- Company incorporation deed (original and copy).
- NIT registration (company and legal representative).
- Utility bill or lease agreement as proof of business address.
- List of shareholders with their NIT and percentage of ownership.
6. ONEC registration & solvency certificate
After incorporating a company in El Salvador, you must register at ONEC (formerly DIGESTYC):
- Application form.
- NIT registration (company and legal representative).
- Audited initial balance sheet.
- Registration fee based on company assets.
7. Business license registration (CNR)
- Application form.
- Audited initial balance sheet.
- ONEC solvency certificate.
- NIT registration (company and shareholders).
- Payment of registration fees.
8. Municipal business license
To operate a business in El Salvador, you must obtain a municipal business license:
- Application form.
- Proof of tax payments.
- Notarized company incorporation deed (original and copy).
- NIT (company and legal representative).
- Audited balance sheet.
- Notarized legal representative credentials.
9. Ministry of Labor – Workplace Registration
- Application form.
- Company incorporation deed (original and copy).
- Legal representative credentials (notarized copy).
- Audited initial balance sheet.
- NIT registration (company and legal representative).
10. Internal work regulations (Mandatory for 10+ Employees)
- Original and copy of submission letter.
- Three copies of internal work regulations.
11. Salvadoran Social Security Institute (ISSS) registration
- Employer registration application.
- Company incorporation deed (original and copy).
- NIT registration (company and legal representative).
12. Pension Fund Administrator (AFP) registration
- Business details must be sent to the selected AFP.
- Copy of NIT and VAT registration must be provided.
- Employees not enrolled must register with an AFP of their choice.
Steps to Incorporate
a Company in El Salvador
Preguntas frecuentes al constituir una empresa en El Salvador
Frequently asked questions about business registration in El Salvador
What is the minimum capital required to register a company in El Salvador?
The minimum share capital required is $2,000 USD.
Do I need to pay the entire share capital upfront?
No. You must pay at least 5% ($100 USD) at the time of incorporation. The remaining amount can be paid within one year.
How many shareholders are required to incorporate a company?
A minimum of two shareholders is required. These can be individuals or legal entities, either local or foreign.
What is a company’s legal representative?
The legal representative is the person authorized to act on behalf of the company. This can be a sole administrator or the president of the board of directors.
Is a legal representative mandatory?
Yes. According to Article 127 of the Salvadoran Tax Code, every company must appoint a legal representative with a physical presence in El Salvador.
Do companies need to file tax declarations even if they don’t generate income?
Yes. Article 91 of the Salvadoran Tax Code states that all registered companies must submit tax declarations, even if they don’t generate income or owe taxes.
Need legal assistance for business registration in El Salvador?
At Interbiznet, we specialize in company formation in El Salvador. Our team of experts provides legal advisory services to help you navigate the incorporation process and establish your business successfully.